It is generally recommended that you give your estate planning papers a checkup at least every couple of years, unless there are reasons to do it more frequently. Marriage, divorce, the birth or adoption of a child, coming into a lot of money, or moving to another state should prompt a review. CNBC’s recent article “Be sure to keep your will or estate plan updated. Here are 3 key reasons why” says that a top consideration for a review, is when there’s a major change in your life.
First, ask an experienced estate planning attorney to help you draft a will, if you do not have one. Second, if you are among those who have a will or comprehensive estate plan, here are some things to review:
Things change. It is important to review who you’ve named to be executor. That person is tasked with liquidating your accounts, ensuring your assets pass to the proper beneficiaries, paying any debts not discharged (i.e., taxes owed) and selling your home. You must also be sure that the guardian you have named to care for your children is still the person you’d want in that position.
Create a comprehensive estate plan. As part of estate planning, it is common to create other documents related to end-of-life issues. This includes powers of attorney, so that trusted individuals can make decisions on your behalf if you become incapacitated. Even if you have had no major life event, individuals you previously chose to handle certain duties may no longer be your best choice.
Account beneficiaries. Some assets pass outside of the will, like 401(k) plans, IRAs and life insurance proceeds. As a result, the person designated as a beneficiary on those accounts will get the money, no matter what your will states. Regular bank accounts can have beneficiaries listed on a payable-on-death form. However, if no beneficiary is listed on those accounts, or the named person has already died (and there is no contingent beneficiary listed), the assets will go into probate.
Home Ownership. If you own a home, make certain you understand how it should be titled to ensure it ends up with the person (or people) you intend, since the laws can vary from state to state. There can also be other considerations when it comes to how a house is titled, including protection from potential creditors or for tax reasons when the home is sold. Ask an experienced estate planning attorney to review your specific situation.
Reference: CNBC (Jan. 27, 2022) “Be sure to keep your will or estate plan updated. Here are 3 key reasons why”